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A Second Polyethylene Producer Reduces Its June Increase, Proposes a July Increase
06/17/2022
Another major North American resin producer has reduced its original June increase proposal for Polyethylene (PE) as domestic inventory continues to accumulate amid weak consumer demand, and commodity spot grades decline.
In a letter to customers, ExxonMobil said it was reducing its original June increase of $.06/lb down to $.03/lb. The company added that it would implement another $.05/lb in July.
ExxonMobil's announcement follows LyondellBasell, which said last week that it was reducing its June PE increase of $.09/lb to $.05/lb. LyondellBasell also has a $.05/lb increase proposal on PE out for July.
The June and July initiatives comes after indices reported a $.03/lb increase in May, although some participants with freely negotiated contracts were able to avoid the full increase.
The proposed price increase also comes as inventories remain near record levels following the latest industry data released for May, which showed an 85-million-pound increase, while many Houston remain warehouses packed, and another new major producer (Shell) is expected to enter the market with new PE capacity over the next two months.
The ample supply also has processers seeking price reductions on the spot market. All PE commodity-grade spot prices on The Plastic Exchange Marketplace have fallen $.02/lb so far this month.
By The Plastics Exchange.
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